Peabody Reaches $310 Million Accord on Patriot Retiree Benefits

Peabody Energy Corp. (BTU), the largest
U.S. coal producer, reached an agreement with former unit
Patriot Coal Corp. and a labor union to provide $310 million for
retirees’ health-care benefits.

Peabody agreed to make the payments through 2017 to fund a
group that will determine future benefits for Patriot retirees
and settle all claims related to Patriot’s bankruptcy, St.
Louis-based Peabody said today in a statement.

“We are pleased to resolve the uncertainty among Patriot
retirees by providing substantial funding for the newly
established Voluntary Employee Beneficiary Association,” Chief
Legal Officer Alexander Schoch said in the statement.

The agreement has some conditions, including bankruptcy
court approval and Patriot having an effective plan for
reorganization, Peabody said. In 2007, Peabody spun off
operations and reserves in Central Appalachia, Northern
Appalachia and the Illinois Basin to form Patriot Coal, which
filed for Chapter 11 protection in 2012.